New Report Details How to Unlock Hidden Value in Class B and C Office Buildings
Research Reveals Energy Efficiency and Green Leasing Measures Could Boost Savings
January 15, 2020
FOR IMMEDIATE RELEASE
(WASHINGTON, D.C. – January 15, 2020) The Building Owners and Managers Association (BOMA) International announces the release of a new research report created in partnership with the Rocky Mountain Institute (RMI) and the Urban Land Institute (ULI): Unlocking Hidden Value in Class B/C Office Buildings: Best Practices for Pursuing Low-Cost, High-Impact Energy Efficiency and Green Leasing Strategies. The first study of its kind, this report offers guidance and strategies for implementing energy efficiency and green leasing measures specifically tailored to the owners and operators of Class B and C office buildings.
Compared to their Class A counterparts, Class B and C office properties typically are older buildings with fewer technologies in place. While owners and operators of these properties are often eager to enact sustainability strategies, they can be constrained by smaller budgets, limited staffing and the high demand of day-to-day operational needs. As a result, Class B and C buildings often trail Class A buildings in adopting energy efficiency strategies and green leasing provisions. However, they also are the asset class with the most to gain from these measures. Per this report, these untapped sustainability opportunities have the potential to:
- Reduce operating expenses for a Class B or C building by between $0.26 and $0.61 per square foot;
- Increase net operating income (NOI) for Class B or C properties by between 2.4 percent and 5.6 percent per year; and
- Boost Class B or C property value by approximately $5 to $11 per square foot.
Even with a clear business case, the report recognizes that building owners may still delay action due to three core challenges that Class B and C properties face: being information-constrained, resource-constrained and funding-constrained. These hurdles are accounted for in each implementation strategy, providing Class B and C office building owners and operators with an adaptable framework for success.
“This research drives home not only how much value and savings a single Class B or C building can achieve as the result of implementing the energy efficiency and green leasing strategies outlined in the report, but also how much these strategies can elevate the entire commercial real estate industry’s sustainability efforts,” says BOMA International Chair Scott O. Jones, PE, vice president with Jacobs. “BOMA, RMI and ULI are all deeply committed to providing owners and operators with the research and resources they need to make sustainability both a priority and a reality.”
"Pursuing energy efficiency and green leasing doesn't have to be complicated, especially when owners already have enough on their plates,” adds Greg Hopkins, manager of RMI’s Building Practice. “We've simplified things so they can focus on low-effort, high-impact strategies that can create win-wins for their tenants and their own bottom lines,”
“We are pleased to highlight the value proposition for Class B and C office owners to unlock energy efficiency across their portfolios,” says ULI Senior Vice President Marta Shantz. “This new report offers actionable, realistic strategies to improve energy performance and implement green leasing—it’s exactly what the market needs to take advantage of these opportunities.”
This research was supported with funding from BOMA International and Yardi and prepared by ULI’s Greenprint Center for Building Performance and RMI.
Download the report here.
About BOMA International
Founded in 1907, the Building Owners and Managers Association (BOMA) International is a federation of U.S. local associations and global affiliates. The leading trade association for commercial real estate professionals for more than 100 years, it represents the owners, managers, service providers and other property professionals of all commercial building types, including office, industrial, medical, corporate and mixed-use. BOMA International is the partner individuals in the commercial real estate industry choose to maximize value for their careers, organizations and assets. Its mission is to advance a vibrant commercial real estate industry through advocacy, influence and knowledge. Learn more at www.boma.org.
About Rocky Mountain Institute
About Urban Land Institute
Rocky Mountain Institute (RMI)—an independent nonprofit founded in 1982—transforms global energy use to create a clean, prosperous and secure low-carbon future. It engages businesses, communities, institutions and entrepreneurs to accelerate the adoption of market-based solutions that cost-effectively shift from fossil fuels to efficiency and renewables. RMI has offices in Basalt and Boulder, Colorado; New York City; the San Francisco Bay Area; Washington, D.C.; and Beijing.
The Urban Land Institute (ULI) is a 501(c) (3) nonprofit research and education organization supported by its members. Founded in 1936, ULI now has more than 40,000 members worldwide, representing the entire spectrum of land use and real estate development disciplines working in private enterprise and public service. A multidisciplinary real estate forum, ULI facilitates an open exchange of ideas, information and experience among industry leaders, and policymakers dedicated to creating better
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